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CINCINNATI INSURANCE CO. v. DAWES RIGGING & CRANE RENTAL

June 16, 2004.

CINCINNATI INSURANCE COMPANY, Plaintiff,
v.
DAWES RIGGING & CRANE RENTAL, INC., & STEVE TOEDT, Defendants.



The opinion of the court was delivered by: MICHAEL McCUSKEY, District Judge

ORDER

Steve Toedt suffered a serious physical injury in the course of his employment, and he filed a lawsuit seeking to recover damages from several companies he believed contributed to his unsafe working environment. One of those companies, Dawes Rigging and Crane Rental, Inc., looked to Cincinnati Insurance Company to defend it in the negligence suit in state court. Cincinnati, however, filed a complaint in this court seeking a declaratory order that it has no duty to defend Dawes in the case filed by Toedt. Both parties seek summary judgment on this issue, and for the reasons discussed below, judgment is entered in favor of Dawes.

  BACKGROUND

  In 1998, Dawes leased a crane to Kelly Construction, Inc. for use at the A.E. Staley Manufacturing Company in Decatur, Illinois. At some point, a Dawes mechanic determined that the crane needed a new hydraulic holding valve that supported the boom of the crane. According to his complaint, Toedt, as an employee of Kelly, "was required to and was in fact assisting in the maintenance of the aforementioned crane under the supervision of employees" of Dawes. Toedt's complaint in state court alleges that Dawes acted negligently, through its employees, in securing the boom of the crane, which resulted in "severe painful and permanent injuries" when the boom fell on him.

  Dawes believed that Kelly's insurance carrier would be responsible for its defense in the Toedt action. Accordingly, Dawes tendered its defense to Cincinnati, claiming that it was an "additional insured" on Kelly's general liability insurance policy. Cincinnati disagreed with Dawes's interpretation of the Kelly insurance policies, and it brought the dispute to this court for resolution.

  1. Agreements between Dawes and Kelly

  In memorializing the leasing of the crane, Dawes and Kelly executed an Equipment Lease on April 17, 1998. Several sections of that document are relevant to the issues before this court. Portions of paragraphs two and four provide that Kelly is responsible for insurance coverage for the machine and physical damage, with Dawes named as an additional insured. Paragraph nine requires Kelly to "at [its] own expense maintain the Equipment in good working order and condition." And paragraph ten notes that the contract is deemed to have been made in the state of Wisconsin.

  In addition to the written lease agreement, Dawes and Kelly reached an understanding about maintenance for the cranes. Kelly paid Dawes a weekly fee to have a Dawes mechanic available in Decatur to perform any needed equipment repairs or maintenance. This agreement is unwritten, and the parties disagree as to the precise contours of that agreement in terms of which company controlled and directed the repair work.

  2. Kelly's Insurance Policies Cincinnati attached to its motion for summary judgment copies of the insurance policies it had issued to Kelly for the time period during which Toedt's accident occurred. Kelly had procured a Commercial General Liability policy, number 501 59 71, ("CGL policy") and a Commercial Umbrella Liability policy, number 441 97 85 ("umbrella policy"). In response to those attachments, Dawes claimed that Cincinnati has not provided "evidence admissible under the Rules" that those are the policies at issue in this case. In its own motion for summary judgment, however, Dawes relied on the same policies, admitting "for purposes of this motion" that Cincinnati's complaint alleged that these are the relevant policies.

  It is disingenuous for Dawes to object to the policies Cincinnati attached to its motion for summary judgment without raising any legal or factual argument to support its objection and then to rely on the exact same documents in its own motion for summary judgment. It does not appear, despite Dawes's empty objection, that there is any material dispute at this time that these are the relevant policies for this court to consider in ruling on the motions for summary judgment.

  The CGL policy contains GA 472 01 95, a page identified with a handwritten number 19 and entitled "Automatic Additional Insured — Contractor." This document defines as an additional insured, "[t]he person or organization shown in the Schedule but only with respect to liability arising out of [Kelly's] ongoing operations performed for that insured." The "SCHEDULE" portion of the document lists "[a]ny person or organization for whom [Kelly is] required in a written contract, oral agreement or oral contract where there is a certificate of insurance showing that person as an ADDITIONAL INSURED under this policy."

  3. Pending Motions

  Both parties seek summary judgment on the issue of whether Cincinnati has a duty to defend Dawes in the Toedt proceeding. Cincinnati filed its motion (#74), along with a memorandum of law (#75), and exhibits (#76). Dawes responded (#82), and Cincinnati filed a reply (#87). Dawes submitted its own motion for summary judgment (#78) and a memorandum of law in ...


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